Temporary relief.

Byline: The Register-Guard

Congress appears poised to rescue companies struggling to fund their traditional pension programs, which is good news for retirees and cash-strapped businesses. But the remedy is at best an aspirin for an ailment that demands intensive care.

The Senate on Wednesday overwhelmingly passed legislation that would save companies an estimated $80 billion on their pension contributions over the next two years. It's temporary relief designed to help businesses weather the "perfect storm" of economic conditions that have threatened the health of traditional pension plans: rock-bottom interest rates, plummeting stock prices and an anemic economy.

The bill temporarily changes the way companies compute what they will owe their employees in the future through the retirement plan. The accounting change would lower the total plan obligations, allowing companies to avoid having to make huge current investments to shore up the dwindling funds.

Presumably, the relief would allow businesses to redirect the pension savings into new hires or improvements to their plants and products, further stimulating the economy.

But it's unclear if President Bush will support whatever emerges from committees working to reconcile House and Senate bills addressing the pension issue.

Where the Senate action runs afoul of the Bush administration is in its inclusion of provisions to help specific industries - in this case airlines and steel companies - as well as unions and certain other employers solve an additional $16 billion in pension problems. The three Cabinet secretaries who comprise the board of the Pension Benefit Guaranty Corp., the financially shaky federal agency that insures pensions, warned Senate Majority Leader Bill Frist that they would recommend a veto of legislation if it ``encourages firms to underfund their pensions.''

The secretaries of commerce, labor and treasury did not specify exactly what might trigger the veto request, but their position is consistent with previous administration opposition to pension relief aimed at individual companies or industries.

If an acceptable compromise is reached, the new pension relief would stay in effect for two years. In the interim, critics of the current pension law hope that Congress will overhaul the maddeningly complex and flawed rules covering defined-benefit plans.

Such reform is desperately needed. Despite $100 billion a year in federal tax subsidies to encourage employers to provide pension plans, only 44 percent of private-sector workers are covered, a percentage that hasn't budged since 1970.

More important, reform needs to address the disparity in pension coverage between wealthy and lower-paid employees. Two-thirds of pension benefits go to the 15 percent of households with more than $100,000 in income, according to the non-profit Economic Policy Institute.

The lower an employee's income, the less likely he or she is to be covered. Seventy-six percent of workers earning more than $1,000 a week were covered by an employer plan in 1999, the EPI reported, but only 33 percent of workers earning $300 to $399 a week were covered.

The current pension system is both unfair and unstable. Congress needs to perform major surgery without delay, because the temporary pension pain relief wears off in two years.